Strategy holds billions of dollars in Bitcoin while increasingly attracting retail investors through the issuance of securities.
ForkLog delves into the business model of Michael Saylor's company, why critics label it a financial pyramid, while supporters view it as an example of effective risk management, and what lies behind the recent sale of part of its cryptocurrency reserves.
What’s Happening with Strategy Now
As of June 9, 2026, Strategy is the largest corporate holder of Bitcoin, with over 845,000 BTC on its balance sheet. The company's model is straightforward: raise capital in the market and buy the leading cryptocurrency. The complexity lies in the instruments it uses and who is on the other side of the transactions.
Source: Strategy.In its latest transaction, the company purchased 24,869 BTC for approximately $2 billion while simultaneously paying off $1.5 billion in debt. A key detail: 95% of the funds for the purchase came not from selling common stock but from issuing preferred securities, STRC (Stretch). Only 5% came from common stock.
This shift has become a major topic of discussion in the crypto community.
How the Company’s Financial “Machine” Works
Strategy has several sources of capital.
Common stock (MSTR) — issued through an ATM program. Each new issuance dilutes the shares of existing holders, which is why the ATM program causes the most frustration among shareholders.
Convertible bonds — a tool for institutional investors. Investment banks sell exposure to MSTR through these bonds. Some of these bonds have a zero coupon but come with the right to convert into shares at a predetermined price.
Preferred securities, including STRC, are a different story. According to Blockspace Live podcast hosts Charlie Spears and Colin Harper, this is a “retail play”: institutions hardly buy them, and if they do, it's a small portion of their portfolio. STRC pays dividends of about 11%.
https://youtu.be/3QQIuJWhggA?si=2Blih8RyVdWeKSPS
The choice of instrument depends on the market. When Bitcoin's volatility is low and prices are stagnant, there is little demand for new shares — selling them would have to be done “at an unfavorable price.” During such periods, it is more advantageous for the company to issue STRC. However, this approach has a downside: dividends must be paid on preferred securities, and these obligations are not going away.
The Pyramid Debate: Arguments For and Against
The question of whether Strategy is a pyramid scheme has been debated for a long time. An analysis by Mark Meldrum on Reddit sparked a lengthy discussion. Proponents of this view argue that payments to current investors are essentially financed by new issuances, and the Bitcoin on the balance sheet only generates “theoretical” profits until it is sold.
https://www.youtube.com/watch?v=P5LKZ1-6BWM
A counterargument in the same thread states that borrowing against an asset for investment is common practice. Real estate and stocks are constantly financed this way, and the principle itself does not make a model a pyramid scheme. The difference is that Strategy is buying a volatile asset without a stable price.
Similar points are discussed on other platforms, such as a publication on LinkedIn where private equity manager Sasha Jovanovic examines the topic through the lens of corporate finance.
According to the expert, the company uses Bitcoin as its primary unit of account. In 2025, the return on shares in the leading cryptocurrency was 22.8%. Jovanovic emphasized that this data is transparent and auditable, whereas in Ponzi schemes, returns are hidden or fabricated.
Strategy directs new capital to purchase digital gold for reserves rather than to pay previous investors. This model creates a “flywheel”: the rising price of the asset allows for raising funds through bonds and additional stock issuances for new purchases.
Jovanovic noted that the company does not hide volatility but monetizes it. Over the year, the structure issued debt instruments worth $7 billion. He emphasized that even with a 90% drop in the asset's price (to $8,000), the reserves would cover the net debt.
Jovanovic concluded that accusations of creating a pyramid scheme stem from a misunderstanding of the company's balance mechanics and the use of unconventional treasury management methods.
Users on the r/CryptoCurrency subreddit point out that Saylor's own statements highlight vulnerabilities in the MSTR structure. Skeptics compared the situation to the 2008 mortgage crisis, where financial institutions also used high leverage and overvalued assets. However, other users noted that Strategy's reserves are too small to create a systemic shock in the entire economy.
In reality, the risks appear modest. The share of convertible debt is small relative to the value of Bitcoin reserves, and many bond rates are close to zero. This reduces the likelihood of a forced collapse of the scheme, although it does not eliminate the question: how to meet obligations without selling Bitcoin.
Why Sell Bitcoin
The main news in recent weeks has been the sale of a small amount of the leading cryptocurrency. Meanwhile, Saylor has repeatedly stated that he would not sell digital gold.
Never sell your Bitcoin.
— Michael Saylor (@saylor) February 2, 2025
In the Blockspace Live podcast, the sale was described more as a signal than a money-making transaction.
https://youtu.be/kC7ec5zwNAo?si=Hp-F-r6QE0Ae6IuP
The idea is that Saylor is showing the market that he is not so stubborn as to never touch the reserves. It would have been much more concerning if he had refused to sell altogether. The volume is so small that it hardly affects the balance — yet it is being discussed extensively.
Here, an important term emerged — reflexivity. Previously, the scheme worked like this: Strategy issues shares, buys Bitcoin, and MSTR prices rise. Now the logic is reversing. When the company sells digital gold, its shares fall harder than Bitcoin itself, and the sale further pressures the asset's price. Being a major player provides advantages but also creates a trap.
Simultaneously, the public landscape is changing. Participants in the Blockspace Live podcast noted that Saylor is now facing noticeable “competition for attention” — for example, Jeff Walton, who is building a reputation as a more understandable and risk-oriented speaker.
Coffeezilla just debated Jeff Walton for an hour about bitcoin and Michael Saylor’s digital credit business.
If you don’t know him, @Coffeebreak_YT has become the most popular YouTuber focused on exposing crypto scams and is skeptical of the strategy. pic.twitter.com/8LWYDxyY5a
— Documenting ₿itcoin 📄 (@DocumentingBTC) May 7, 2026
Why Pay Off These Bonds
Spears and Harper analyzed an unexpected move by Strategy: the company paid off convertible bonds maturing in 2029 with a conversion price above $670. Notably, this issuance was neither the closest to the payment date nor had the highest coupon rate.
The 2029 bonds have minimal intrinsic value: the market hardly prices in the value of the built-in conversion option, estimating it at nearly zero. This means that for each dollar of debt paid off, the company spends the least cash. This makes them the least costly for early redemption.
This indicates not so much a forecast of the stock's value but a desire to reduce debt with minimal costs per unit of redemption. After the transaction, the company has about $6.5 billion in convertible debt maturing by 2032.
Hence, the internal tension in the model. MSTR holders want less dilution. STRC holders want cash reserves to flow freely for dividends. Satisfying both groups simultaneously is challenging, and the company is currently leaning towards STRC.
Who Actually Holds These Securities
The picture is completed by data from Dovey Wan, managing partner at Primitive Ventures: about 80% of STRC holders are retail investors, and around 40% of MSTR shareholders are also retail. Wan herself acknowledged that the idea of a “built-in pyramid” in STRC does not seem to be confirmed.
80% of $STRC holders are retail investors
40% of $MSTR holders are retailWas thinking STRC was an insiti ponzi but apparently not 🤔
— Dovey "Rug the fiat" Wan (hiring) (@DoveyWan) May 8, 2026
This explains why the issue of dividends is so sensitive. According to participants in Blockspace Live, the balance sheet has about six months' worth of STRC payments. Beyond that, the company essentially has two paths: reduce the dividend on STRC or sell Bitcoin.
https://youtu.be/6LAuVjAiFew?si=CFzLD7mUgeIIfORA
It is this second scenario that worries the market. The concern is not about the small amounts sold but about the fear that sales may increase to cover dividends. The hosts of Blockspace Live believe the likelihood of an “explosion” is low but acknowledge that with $50 billion in Bitcoin, even a hint of a large sell-off unsettles market participants.
Meanwhile, the recent decline in the crypto market has been linked not so much to Strategy but to a capital shift towards artificial intelligence — against the backdrop of anticipated IPOs from SpaceX, Anthropic, and OpenAI. Bitcoin's volatility is at a ten-month low.
What Critics Are Saying
Peter Schiff, president of Euro Pacific Capital, stated that MSTR is the “largest buyer of Bitcoin and the largest loser.”
$MSTR Is the biggest Bitcoin buyer and the biggest Bitcoin loser. Strategy has been buying Bitcoin for over five years, and so far that "investment" has netted an unrealized $12 billion loss. If a genius like @saylor can't even make money in Bitcoin why should anyone else try?
— Peter Schiff (@PeterSchiff) June 4, 2026
According to his calculations, after more than five years of purchases, the unrealized loss has reached $12 billion, and if “even a genius like Saylor cannot make money in Bitcoin, why should anyone else try?”
Institutional voices are also joining the criticism. Jeff Dorman, chief investment officer at Arca, described the situation with Strategy's preferred securities as “out of control,” pointing to a scale of around $15 billion in such issuances.
Attention to the company is growing in major media outlets. A significant piece about Saylor and Strategy was published by The New York Times — a sign that the story has extended far beyond the crypto industry.
What to Watch Going Forward
Strategy is not a classic pyramid in the legal sense. In practice, it all hinges on two things: the price of Bitcoin and the ability to attract new capital.
The main questions for the near future boil down to three:
- Will the company continue to service dividends on STRC without large Bitcoin sales?
- Will it manage to close the remaining $6.5 billion in convertible debt without resorting to mass asset sell-offs?
- Will retail demand for preferred securities remain if Bitcoin rises sharply and makes common stock a more convenient way to raise funds?
For now, Strategy manages to maintain a balance between signaling to the market and meeting real obligations.